TNB Handbook 1QFY15 CLSA ASEAN Forum · 2015-10-02 · Jun '06 Jul '08 Mar '09 Jul '09 Jun '11 Jan...

Prepared by:Investor Relations & Management Reporting Department

[email protected] FINANCE DIVISION

1QFY’15

TNB HANDBOOK

GRAND HYATT ERAWAN BANGKOK, THAILAND

11th – 13th MARCH 2015

CLSA ASEAN FORUM

AGENDA

2

1. INTRODUCTION TO TENAGA

2. INTRODUCTION TO MESI

3. TARIFF

4. KEY PERFORMANCE INDICATORS (KPIs)

5. BUSINESS STRATEGY & DIRECTION

6. DIVIDEND POLICY

7. OUTLOOK

PART ONE

57%34%

9%

49.2%

46.3%

3.4% 1.1%

Gas & LNG Coal Hydro & Others Oil & Distillate

3

PENINSULARMALAYSIA

SARAWAK

SABAH

Sabah Electricity Sdn Bhd(A 83% TNB Subsidiary)Tenaga Nasional Bhd

(TNB)

SINGAPORE

BRUNEI20,944MW*

3,650MW

1,392MW*

695MW

10,974MW

* Includes IPPs

Installed Capacity vs. Generation mix

INSTALLED CAPACITYTNB : 51.1%IPP: 48.9%

GENERATION MIXTNB : 49.5%IPP: 50.5%

FY’11 FY’12 FY’13 FY’14 1QFY’15

TNB - Peninsula Installed Capacity (MW) 11,530 11,462 11,462 10,814 10,698

Total units sold (Gwh) 97,888 102,132 105,479 108,102 27,431

Total customers (mn) 8.11 8.36 8.35 8.64 8.71

Total employees (‘000) 31.9 33.6 35.0 36.1 36.1

Total assets (RM bn) 79.1 88.5 99.0 110.7 112.8

INTRODUCTION TO TENAGAThree Major Utilities in Malaysia

4

INTRODUCTION TO TENAGANo of Customer vs. Sales Value vs. Unit Sales

0%

20%

40%

60%

80%

100%

No ofCustomer

Sales (RM) Sales (Gwh)

0.3%

39.0% 42.2%

17.1%

42.1% 34.6%81.8%

17.5% 21.3%

0.8% 1.4% 1.9%

Industrial Commercial Domestic Others

0% 20% 40% 60% 80% 100%

FY'06

FY'07

FY'08

FY'09

FY'10

FY'11

FY'12

FY'13

FY'14

1QFY'15

47.7

48.2

48.0

44.1

44.8

44.3

43.6

42.5

42.0

42.2

29.9

31.6

31.9

33.9

33.4

33.8

34.1

34.4

35.4

34.6

18.1

18.9

18.7

20.4

20.3

20.3

20.6

21.3

21.6

21.3

4.3

1.4

1.4

1.7

1.5

1.6

1.7

1.8

1.8

1.9

Industrial Commercial Domestic Others

Sectoral Sales Analysis (Gwh)

• Shift from Industrial-based to Service-based economy

• Increasing market share from Commercial sector• Commercial sector contributes the highest

electricity sales margin

1QFY’15

25.030.035.040.045.050.055.0

36.2

47.9

31.7

Industrial

Average Tariff

Commercial

Domestic

sen/kwh

38.5

Overall Reduction (Mar’15 – June’15)2.25 sen/kWh @ 5.8%

Average Base Tariff by Sector ICPT Adjustment

5

INTRODUCTION TO TENAGAIndustry Regulatory Framework

PRIME MINISTER/CABINET

MINISTRY of ENERGY, GREEN TECHNOLOGY AND WATER (KeTTHA)

ENERGY COMMISSION (Regulator)

- Promote competition- Protect interests of

consumers- Issue licenses- Tariff regulation

Tenaga Nasional Berhad

ECONOMIC PLANNING UNIT (EPU)- Develops and complements

Privatisation Policy- Evaluates and selects IPPs- Recommends ESI policies

Ministry of Finance/

Khazanah Nasional Berhad

Shareholders Policy Maker

Other Govt. Agencies & Corporations Public

Empowered by Electricity

Supply Act 1990Holds

‘Golden’ Share

IPPs

Consumers

31.41%

36.34%

Foreign

6.71% 25.54%

SEDA Malaysia

Market Cap (2nd)RM79.9bn (USD22.4bn)

- As at 9th Jan’15 -

As at 30th Nov’14

AGENDA

6



3. TARIFF



6. DIVIDEND POLICY

7. OUTLOOK

7

TRANSFORMATION INITIATIVES BY GOVERNMENTAimed at Delivering a Reliable, Transparent, Efficient and Sustainable ESI

1st Gen IPP / Restricted

Bidding

Subsidy Rationalisation

Programme

FCPTMechanism

LNG Importation

Nuclear Energy Capacity Building

National RE Policy & Action

PlanFIT & RE Fund

Legal & Regulatory Framework

Enhancement

*Source: MyPower

8

TRANSFORMATION PLAN : TIMELINEThe New Energy Policy Addresses, Economic Efficiency, Security of Supply and Social & Environmental Objectives

2010 2011 2012 2013 2014 2015 2016 -2020

*Source: EC

• Competitive Bidding

• Account Unbundling

• Technical & Financial Benchmarking

• Fuel Supply Security

• Generation Development Plan

• Tariff Analysis• Transparency in

dispatching

• Development of Regulation Enhancement Plan

• Industry Award Program

• Energy Database • Performance

Regulation• Activity-based

licensing (G,T,D,Retail)

• Fuel Pricing• Implementation of

new ACP mechanism

• Development of industry codes of Practice & Guidelines

• Enforcement of Grid & Distribution Codes

• Effective service standard & regulatory monitoring

• Issuance of RIGs• Ring-fenced

functions of Grid System Operator & Single Buyer

• Commence outsourcing of selected activities

• Operationalisation of a more managed market

• Implementation of new safety regime

• Collaborative framework with other parties in regulatory activities

• Open access of gas network

• Implementation of IBR (Gas)

• Implementation of competitive bidding & expansion plan by Single Buyer

• Implementation of IBR (Electricity)

• Enactment of Competition Regulations

• Establishment of Electricity market Authority

• Formulation of market rules

• Operationalisation of liberalised market

EnergyPricing

Change Management

GovernanceEnergy Efficiency

Energy Supply

New Energy Policy

1

2

3 4

5

TRACK 3A 1 X 1,000 MW COAL-FIRED

COD October 2017

LEVELISED TARIFF

22.78 sen/kWh

STATUS TNB has signed agreements on 16 August 2013 for:i. PPA with TNB Manjung Five Sdn Bhd “Manjung 5” to design,

construct, own, operate & maintain the coal plant capacity (25years term)

ii. SFA “Shared Facilities Agreement” between TNB, Manjung 5 &TNB Janamanjung

iii. CSTA “Coal Supply and Transportation Agreement” between TNBFuel Services & Manjung 5.

EPC contract signed on 21 August 2013 between:TNB Western Energy Bhd; a wholly owned subsidiary of Manjung 5 withConsortium of Sumitomo Corp, Daelim Industrial Co Ltd, Sumi-PowerM’sia Sdn Bhd and Daelim M’sia Sdn Bhd.

TNB Western Energy Sukuk has been issued out on 30 January 2014 fornominal value of RM3.655 billion.

TECHNOLOGY Ultra Super Critical Boiler Technology OEM to EPC is Hitachi

9

ENERGY PRICING – COMPETITIVE BIDDING

TRACK 1 1,071 MW CCGT PRAI

COD January 2016

LEVELISED TARIFF

34.7 sen/kWh

STATUS TNB has signed agreements for:i. EPC – TNB Northern Energy Bhd & Samsung

Engineering & Construction (M) Sdn Bhdii. Long term Service – TNB Prai & Siemens AGiii. O&M – TNB Prai & REMACO

TNB Northern Energy Sukuk has been issued outon 29 May 2013 for nominal value of RM1.625billion.

TECHNOLOGY Siemens Super Critical H-Class technology gasturbine combined-cycle efficiency of greaterthan 60%

TRACK 2 RENEWAL OF EXPIRING PLANTS : 2,253 MW CCGT

PLANTS GENTING SEGARI TNBPASIR GUDANG

EXTENSION 10 years(to 2026)

10 years (to 2027)

5 years (to 2022)

LEVELISED TARIFF

35.3 sen/kWh

36.3 sen/kWh

37.4 sen/kWh

STATUS Reduction rates of CP effective 1 March 2013 until expiry of current PPA

1

TRACK 3B 2 X 1,000 MW COAL-FIRED

COD November 2018 & May 2019

LEVELISED TARIFF

25.33 sen/kWh

STATUS TNB has signed agreements on 22 July 2014 :i. PPA with Jimah East Power Sdn. Bhd., the incorporated company

of the consortium of 1MDB and Mitsui & Co. Ltd, to design,construct, own, operate and maintain the coal plant (25 yearsterm) at Mukim Jimah, Port Dickson, Negeri Sembilan.

ii. CSTA “Coal Supply and Transportation Agreement” with TNB FuelServices Sdn. Bhd.

TECHNOLOGY 2 units of IHI Ultra Super Critical Technology Steam Generator & 2 Unitsof Toshiba Turbo Generator

Track 1 to Track 3

10

ENERGY PRICING1

TRACK 4A 1,000 – 1,400 MW CCGT

COD June 2018

STATUS TNB has signed heads of agreement on 24 July 2014 with:i. SIPP Energy Sdn. Bhd., signifying the principal terms of the

proposed joint venture which will undertake to build, own andoperate a power plant of approximately 1000MW-1400MW on aland in Pasir Gudang, Johor.

TECHNOLOGY -

Track 4A

EFFICIENCY AND GOVERNANCEIncentive Based Regulation (IBR) - Economic Regulation Methodology to Promote Efficiency And Transparency

•Rewarded for seeking efficiencies in operational and capital expenditure

Operational Efficiencies

•Rewarded for maintaining an efficient capital structure

Financial Efficiencies

•Rewarded for delivering improvements in network performance

Performance Efficiencies

11

3 4

12

EFFICIENCY AND GOVERNANCEIncentive Based Regulation (IBR) – The Move Towards Better Regulation

11 Regulatory Implementation Guidelines (RIGS) were Developed for IBR Implementation*Source: EC

The Economic Regulatory Framework for Regulating TNB

The Tariff Setting Mechanism and Principles for Tariff Design

Incentive Mechanisms to Promote Efficiency and Service Standards

The Process of Tariff Reviews

Creation of Regulatory Accounts and Its Annual Review Process

IBR mechanism to strengthen the following:

5 Business entities under IBR (Accounting

Separation)

3 4

AGENDA

13



3. TARIFF



6. DIVIDEND POLICY

7. OUTLOOK

TARIFFElectricity Tariff Review = Base Tariff + Imbalance Cost Pass-Through (ICPT)

14*Source: EC

15

TARIFFImbalance Cost Pass-Through (ICPT) Comprises Two Components

Imbalance Cost Pass-Through (ICPT)

Fuel Cost Pass Through (FCPT)

Generation Specific Cost Adjustment

(GSCPT)

Adjustment in the following 6 month period, subject to

government approval

FCPT (gas/LNG and

coal only)

Actual cost of generation

Adjustment in the following 6 month period, subject to

government approval

Changes in:• Other fuel costs such as distillate and fuel oil• All costs incurred by SB under the power

procurement agreements (PPAs, SLAs and etc.) and fuel procurement agreements (CSTA, CPC, GFA/GSA and etc.)

• Renewable energy FiT displaced cost

Changes in gas/LNG and coal costs

PPAs Power Purchase AgreementsSLAs Service Level AgreementsCSTA Coal Supply and Transportation AgreementCPC Coal Purchase Contract

0.9

3.41

0.170.51

TARIFF

16

Tariff Components sen/kWh % increase

Average Tariff (Jun 2011) 33.54

Fuel Components:

• Piped-gas regulated price (from RM13.70/mmBTU to RM15.20/mmBTU@1,000 mmscfd)

0.51 1.52

• Coal (market price) (from USD85/tonne to USD87.5/tonne CIF@CV5500kcal/kg)

0.17 0.51

• LNG RGT market price at RM41.68/mmBTU(for gas volume > 1000 mmscfd) 3.41 10.17

Non-fuel component (TNB Base Tariff) 0.90 2.69

AVERAGE BASE TARIFF EFFECTIVE 1st JANUARY 2014 38.53 14.89

82% on fuels

18% on base

4.99 sen/kwh

Piped-gasCoal

LNG

Non-fuel

Average Base Tariff of 38.53 sen/kwh is Effective from 1st January 2014

TARIFF82% of Tariff Increase in January 2014 is due to Reduction of Gas Subsidy, Introduction of LNG at Market Price and Increase in Coal Benchmark Market Price

17*Source: EC

12%(inc. Fuel)

2% 2.7%

24%

-3.7%

5.1%

12.2%

-5.8%

Gas RM6.40per mmBTU

Gas RM14.31per mmBTU




-6

-1

4

9

14

-8%

-3%

2%

7%

12%

17%

22%

27%

Jun '06 Jul '08 Mar '09 Jul '09 Jun '11 Jan '14 Mar'15

Qua

ntum

of

tari

ff r

evie

w

Base tariff adjustment Fuel adjustment Gas price

Govt. decided not to review

gas price for the power sector ICPT Adjustment

TARIFFFrequency of Review & Underlying Assumptions

18

Approval date May 2006 Jun 2008 Feb 2009 Jun 2009 May 2011 Dec 2013 Feb 2015

Effective date Jun 2006 Jul 2008 Mar 2009 Jul 2009 Jun 2011 Jan 2014 Mar 2015

Quantum 12% 23 – 24% (3.7%) Neutral 7.1% 14.9% (5.8%)

Gas (RM/mmbtu) 6.40 14.31 10.70 10.70 13.70 15.20 15.20

Coal (USD/MT) 45.00 75.00 85.00 85.00* 85.00* 87.50** 87.50**

Average Tariff(sen/kWh) 26.2 32.5 31.3 31.3 33.5 38.5 38.5

* Forex (RM/USD) = RM3.6**Forex (RM/USD) = RM3.14

ICPT Adjustment(Jan 2014 – Dec 2014)

IBR

19*Source: EC

2010 2011 2012 2013 2014 2015 2016 -2020

IBR Timeline

• Implementation of IBR (Electricity)

TARIFF

AGENDA

20



3. TARIFF



6. DIVIDEND POLICY

7. OUTLOOK

21

KEY PERFORMANCE INDICATORS (KPIs)Incentive Based Regulation (IBR) - Incentive and Penalty Mechanism Based on Performance Targets Determined by EC

• Incentive/penalty is capped at +/- 0.3% to 0.5% of annual revenue requirement

• No incentive/penalty if performance between upper and lower bound targets

• Any incentive/penalty to be given in the next regulatory period

PERFORMANCE KPIs

*Source: EC

TNB Has Been Improving its Performances Over the Years and Now in Line with World Standards

22

1ST PHASE : HEADLINE KPIs

Return on Assets (ROA) (%)

Company CPU (sen/kwh)

Unplanned Outage Rate (UOR)(%)

T & D Losses (%)

Transmission System Minutes (mins)

Distribution SAIDI (mins)

Revenue from Non-Regulated Business (RM bn)

INITIATIVES

Fina

ncia

l Ind

icat

ors

Tech

nica

l Ind

icat

ors

4.7

2.7

9.5

0.9

65.0

ACTUALFY’10

4.0

2.9

9.7

1.0

68.6

ACTUALFY’09

4.6

3.3

9.5

6.6

78.0

ACTUALFY’08

6.3

2.2

10.0

9.3

83.0

ACTUALFY’07

3.3

4.7

11.0

7.3

101.6

ACTUALFY’06

2.2

6.1

10.5

14.0

148.0

ACTUALFY’05

Gearing (%) 42.546.546.949.958.164.9

6.5

< 60.0

No target

No target

9.0

< 100.0

TARGETFY’10

Not track as TNB Headline KPI during 1st phase

Note:

KEY PERFORMANCE INDICATORS (KPIs)

22.6

14.6 15.113.8

11.9

0.0

5.0

10.0

15.0

20.0

25.0

FY'11 FY'12 FY'13 FY'14 FY'151Q

0.1

0.2

0.1

0.0

0.2

0.0

0.1

0.2

FY'11 FY'12 FY'13 FY'14 FY'151Q

KEY PERFORMANCE INDICATORS (KPIs)Technical Indicators

23

Technical Indicators

2nd PHASE : HEADLINE KPIs

minsmins

91.9

83.988.9

82.1

93.0

60.0

70.0

80.0

90.0

100.0

FY'11 FY'12 FY'13 FY'14 FY'15

%

1Q

Equivalent Plant Availability Factor (EAF) (%)

1

System Minutes (mins)2 SAIDI (mins)3

KEY PERFORMANCE INDICATORS (KPIs)

24

Financial Indicators

4.1 4.55.6

6.2

8.3

2.0

4.0

6.0

8.0

10.0

FY'11 FY'12 FY'13* FY'14 1QFY'15

%

30.931.9

31.0

35.0

32.5

24.026.028.030.032.034.036.0

FY'11 FY'12 FY'13* FY'14 1QFY'15

Sen/Kwh

1.92.3 2.2

2.5

0.6

0.0

1.0

2.0

3.0

FY'11 FY'12 FY'13 FY'14 1QFY'15

RM bn

Company CPU(sen/kwh) #

1

Revenue from Non-Regulated Business (RM bn)

3Return on Assets(ROA)(%)

2

# Exclude Finance Cost

* FY2013 restated

Financial Indicators

2nd PHASE : HEADLINE KPIs

AGENDA

25



3. TARIFF



6. DIVIDEND POLICY

7. OUTLOOK

20-YEAR STRATEGIC PLAN

26

GEOGRAPHICAL EXPANSION

(SERVICES) 2015

GEOGRAPHICAL EXPANSION

(SERVICES) 2015

OVERSEAS INVESTMENT 2020

OVERSEAS INVESTMENT 2020

GLOBAL LEADERSHIP 2025

GLOBAL LEADERSHIP 2025

SERVICE EXCELLENCE 2010

SERVICE EXCELLENCE 2010

Position for Growth

T 7

• Improve Core Operations under T7 Strategy

• Place Tenaga as the best performing company in Malaysia by 2007 and as the Regional best by 2010

• Expand works and services related to the energy sector

• Creation of new revenue stream leveraging on Tenaga’s knowledge and competencies in the energy business

• Improve financial position and human resource readiness of Tenaga

• Venture into power/energy related investments in the international arena

• Excel in:- All business areas- Reputation as a

strong business partner

- Ability to continue to create shareholder value

• Tenaga acknowledged as amongst the most admired companies globally

THE PLAN LAYS DOWN THE PATH TOWARDS REALISING OUR VISION OF GLOBAL LEADERSHIP

It builds upon the progress of T7

INTERNATIONAL FOOTPRINTBusiness Expansion in Energy Related Businesses

27

MTM supply of transformers to Saudi Arabia

REMACO O&M Services for Shuaibah IWPP

IWPP: Shuaibah (USD2.7bn) 900MW Power

880,000 m3 / day water 150,000 m3 / day water

TNEC JV Al Reef District Cooling, UAE 8,000 RT

TNEC JV BMC District Cooling, UAE 30,000 RT

IPP: Liberty Power Ltd (USD272m)

235MW

REMACO O&M services for Bong Hydro Plant in Pakistan

REMACO O&M services for Liberty Power Ltd

TSG supply of switchgears to Pakistan

REMACO O&M services –HUBCO (Narowal)

MTM supply of transformers to Brunei

IPP, IWPP & Development Projects

ILSAS continues to provide services for power companies in emerging countries including Vietnam, Yemen, Mongolia, Laos, Indonesia, Thailand, Nepal, Egypt and Pakistan

Supply & Services

REMACO O&M for Shuaiba North Co-Gen (USD320m)

780MW Power; 204,000 m3 / day water (KUWAIT)

TNEC JV with Abu Dhabi Al Samah for District Cooling

Development of the Sumatera – Peninsular Malaysia HVDC Interconnection, Coal-fired

power plant & coal mine mouth projects

Source: Company presentation; Note: REMACO is a 100% owned subsidiary with a focus on O&M; MTM is a wholly owned subsidiary manufacturing transformers; TSG is a subsidiary manufacturing high voltage switchgears; TNEC is a wholly owned subsidiary providing project services and developing energy related projects

Leverage on Tenaga’s capabilities (in Middle East

region) in pursuing overseas investment and services e.g. O&M, project management

etc. in power related businesses

Utilise existing related services (consultation &

training) and manufacturing products as stepping stone for future business in new frontier

countries

REMACO O&M for 225MW Sabiya Power Generation &

Water Distillation Plant (KUWAIT)

AGENDA

28



3. TARIFF



6. DIVIDEND POLICY

7. OUTLOOK

DIVIDENDPolicy and Yield

29

10.0 10.212.0

18.216.2 14.8

36.3

20.017.8

26.0

4.5

20.1

25.0

29.0

1.2% 1.3%1.7%

2.3%

1.8%1.6%

3.6%

2.5%2.2%

2.9%

0.9%

2.9% 2.9%

2.3%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Dividend Paid (gross sen)Yield (Dividend Paid per Share/Price)

Sen/Ordinary Share

Tenaga is committed to pay out dividend based on its Dividend Policy whereby:Dividend is paid out based on 40%-60% of its Company’s Annual Free Cashflow;

Cashflow from Operations less Normalised Capex and Interest Servicing

58.3% free cashflow

Interim Single-Tier Dividendof 10.0 sen per ordinary share

Single-Tier Dividendof 19.0 sen per ordinary share

Total FY’14: 29.0 senper ordinary share

AGENDA

30



3. TARIFF



6. DIVIDEND POLICY

7. OUTLOOK

OUTLOOK FY2015

31

“The growth is expected toremain on a strong trajectorywith revised GDP growth inthe range of 4.5% - 5.5% for

2015”.Prime Minister –

Special Address, 20th Jan 2015

The electricity demandgrowth is expected to be inline with the projectedeconomic growth.

Coal price is expected toremain stable for the next1 year.

Daily average gas volume (mmscfd)

1QFY’14 1,321

2QFY’14 1,383

3QFY’14 1,405

4QFY’14 1,217

1QFY’15 1,218

Average Coal Price (CIF) (USD/MT)

FY’11 106.9

FY’12 103.6

FY’13 83.6

FY’14 75.4

1QFY’15 70.2

GAS SUPPLY

Average Gas Volume (mmscfd)

FY’14 1,332mmscfd

FY’13 1,121mmscfd

*Source: EC

700800900

1,0001,1001,2001,3001,4001,5001,600

wk

1

wk

4

wk

7w

k 10

wk

13

wk

16

wk

19

wk

22

wk

25

wk

28w

k 31

wk

34

wk

37

wk

40

wk

43

wk

46w

k 49

wk

52

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

FY 2014 FY2015

DEMAND GAS VOLUME COAL PRICE321

32

1QFY2015 RESULTS HIGHLIGHTS

Nov 2014

PART TWO

AGENDA

1QFY2015 RESULTS HIGHLIGHTS

• Profit After Tax of RM2.35 billion (1QFY2014: RM1.73 billion).

• 73.2% increase in Capital Expenditure; total amount of RM2.51 billion(1QFY2014: RM1.45 billion).

• 3.3% unit electricity demand growth in Peninsular Malaysia.

• 3.6% increase in Operating Expenses; total amount of RM8.42 billion(1QFY2014: RM8.12 billion).

33

3-Month Ended 30th Nov 2014 Nov 2014

* FY2014 restated

GROUP PROFIT ANALYSISHigher Normalised Profit due to Growth and Tariff Review

34

1.3

0.5 1.80.2

0.20.1 2.3

NormalisedProfit 1QFY'14

Fuel CostCompensation

1QFY'14

AdjustedProfit 1QFY'14

Fuel CostRecovery

Base tariff Growth NormalisedProfit 1QFY'15

(RM mn) 1QFY '14(Restate d) 1QFY '15

Profit After Tax 1,732.4 2,351.0

Less: Forex Translation Gain 252.7 45.9

Profit Before Forex & After Tax 1,479.7 2,305.1

Adjustments for Non-Comparative Items:

Change in Corporate Tax Rate (186.7)

Normalised Profit Before Forex and After Tax 1,293.0 2,305.1

RM bn

25.7%

Nov 2014

RM mn 1QFY'151QFY'14

(Restated)

Total Units Sold (GWh) 27,431.2 26,717.4

Revenue 11,027.1 9,572.4

Operating Expenses (before depreciation)

7,161.8 6,966.4

Operating Income 136.9 69.4

EBITDA 4,002.2 2,675.4

EBITDA Margin (%) 36.3% 27.9%

Depreciation and Amortisation 1,257.4 1,157.9

EBIT 2,744.8 1,517.5 EBIT Margin (%) 24.9% 15.9%Finance Cost 253.9 227.5

Profit Before Tax & Forex Translation

2,574.9 1,363.9

Net Profit Before Forex Translation 2,306.0 1,497.6

Translation Gain 45.9 252.7

Net Profit attributable to :Owners of the Company 2,351.9 1,750.3 Non-controlling Interest (0.9) (17.9)

COAL PRICE & CONSUMPTION 1QFY'14 1QFY'15 Var (%)

Average Coal Price Consumed (USD/MT) FOB 67.5 60.4 -10.5%

Freight 9.1 9.3 2.2%

Others 0.6 0.5 -16.7%

CIF 77.2 70.2 -9.1%

Average Coal Price Consumed(RM/MT) (CIF)

249.0 230.2 -7.6%

Coal Consumption (mn MT) 4.7 5.6 19.1% 35

Higher OPEX Mainly due to Higher LNG Cost, Mitigated by Lower Coal Price

QUARTERLY & YEARLY ANALYSISNov 2014

Table 1:

Table 2:

36

QUARTERLY ANALYSIS: GENERATION MIX (PENINSULA)Fuel Mix Shifting Back to Coal

53.8 58.7 55.949.9 49.2

39.8 35.1 38.2 45.6 46.3

1.2 1.5 3.0 1.7 1.15.2 4.7 2.9 2.8 3.4

1QFY'14 2QFY'14 3QFY'14 4QFY'14 1QFY'15

Gas Coal Oil&Distillate Hydro

%UNIT GENERATED

Average Gas Volume (mmscfd)

1QFY’14 1,321

2QFY’14 1,383

3QFY’14 1,405

4QFY’14 1,217

1QFY’15 1,218

Table 2:

Table 1:

Nov 2014

SYSTEM WEEKLY MAXIMUM DEMAND (PENINSULA)

37

For FY2011 to FY2015

10,000

10,500

11,000

11,500

12,000

12,500

13,000

13,500

14,000

14,500

15,000

15,500

16,000

16,500

17,000

17,500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

WEEK NO.

Sept

1st Qtr 2nd Qtr 3rd Qtr 4th QtrMW

YoY Growth (%)

FY 2011 15,476 MW 9/5/2011 2.7

FY 2012 15,826 MW 20/6/2012 2.3

FY 2013 16,562 MW 13/5/2013 4.7

FY 2014 16,901 MW 11/6/2014 2.0

FY 2015

Peak Demand

New PD:16,901MW(11/06/14)

Nov 2014

CAPITAL EXPENDITURE

38

Major Projects Represent 63.5% of Total CAPEX

43.0%

66.3%

31.8%

18.8%20.7%

11.0%4.5% 3.9%

1QFY'14 1QFY'15General Capex

System Improvement

New Supply

Associated withGeneration

29.8%52.5%

Capex by Category

7.4 13.8 46.4 29.9 16.4 135.2 152.2

278.2 289.4 281.7

464.9 522.9

578.3 479.3 516.9 74.7

105.7

136.8 92.8 101.7

11.0

357.4

539.0 559.9

1,596.6

-

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

1,800.0

2,000.0

2,200.0

2,400.0

2,600.0

1QFY11 1QFY12 1QFY13 1QFY14 1QFY15

693.2 1,152.0 1,578.7 1,451.3 2,513.3

Recurring Generation, Transmission, Distribution, Others Generation Capacity

RM’mn

G

T

D

O

G

T

D

O

G

T

D

O

G

T

D

O

G

T

D

O

63.5%

Nov 2014

Average Coal Price for 1QFY’15 was at USD70.2/MT

COAL REQUIREMENT

39

FY’05 FY’06 FY’07 FY’08 FY’09 FY’10 FY’11 FY’12 FY’13 FY’14 1QFY’15

Average Coal Price (CIF) (USD/metric tonne)

49.8 52.8 45.3 76.4 90.2 88.2 106.9 103.6 83.6 75.4 70.2

Tonne (mn)

7.6 7.9 8.6

12.6 12.511.6

17.818.9

20.820.8

19.3

25.3

0.0

5.0

10.0

15.0

20.0

25.0

30.0

FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15(f)

Estimated Procurement

Fixed Price

Index Linked

Ongoing negotiations (to be negotiated & to be sourced)

49%

18%

33%

50%

35%

6%9%

Country Mix

Indonesia Australia

South Africa Russia

Coal Consumption

Nov 2014

DEBT EXPOSURE & FOREX

40

Nov 2014

RM YEN USD Others

Total Debt (RM bn) 25.3 25.5

Net Debt (RM bn) 20.4 17.3

Gearing (%) 35.6 36.9

Net Gearing (%) 28.7 25.2

Fixed : Floating (%) 99.6 : 0.4 99.3 : 0.7

Final Exposure (%) 100.0 : 0.0 100.0 : 0.0

Weighted Average Cost of Debt (%) 4.91 4.86

Final Exposure (%) 4.96 4.92

30th Nov'14 31st Aug'14Statistics

USD/RM 3.38 3.15

100YEN/RM 2.86 3.04

USD/YEN 118.18 103.62

30th Nov'14 31st Aug'14

30th Nov’14 31st Aug’14

77.3%

12.0%

10.6%

76.6%

12.9%

10.3%

0.1%

RM19.57bn RM19.51bn

RM3.04bn

RM2.68bn RM2.64bn

RM3.28bn

RM0.03bn RM0.05bn 0.2%

DISCLAIMER

All information contained herein is meant strictly for the use of this presentation only

and should not be used or relied on by any party for any other purpose and without the

prior written approval of TNB. The information contained herein is the property of

TNB and it is privileged and confidential in nature. TNB has the sole copyright to such

information and you are prohibited from disseminating, distributing, copying,

re-producing, using and/or disclosing this information.

CONTACT DETAILS

INVESTOR RELATIONS & MANAGEMENT REPORTING DEPARTMENTTenaga Nasional Berhad4th Floor, TNB HeadquartersNo.129, Jalan Bangsar,59200 Kuala Lumpur, MALAYSIATel : +603 2296 5566Fax : +603 2284 0095Email : [email protected] : www.tnb.com.my

IR OFFICERS:Anida +603 2296 6077 [email protected] +603 2296 6183 [email protected] +603 2296 6787 [email protected]

For further enquiries, kindly contact us at:

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